Coffee

The product chosen for its promotion campaign analysis is instant coffee Nescafe produced by Nestle. Before analyzing the promotion campaign, it is important to determine the target audience of Nescafe. In the major part coffee is usually preferred by both male and female at the age of  20 to 45 approximately. Children are usually not allowed to drink much coffee, since caffeine is believed to provoke special hyper reaction. Older people, in turn, are trying to avoid coffee because at this age they are taking special care for their health.

Thus, the typical segmentation in the sector can be represented in the following way:

Demographic characteristics:

men and women from 20 to 45;

single/married/married with children;

elderly people who prefer decaffeinated coffee.

Economic: low, middle and premium segments;

Consumption habits:

regular buyers, random buyers;

those who prefer to drink coffee at coffee bars/ those who prefer to drink coffee at home / those who prefer take-outs;

 those who prefer to drink coffee alone/ in a company;

psychographical characteristics:

people who lead active style of life/passive style of life;

people who prefer status/price/taste/convenience;

businessmen/students/working people. (Cateora, 1990, p.116)

As for Nescafe its target segments are:

1. Married and married with children people who prefer to drink coffee alone at home and buy instant coffee on a regular basis. It is caused by the fact that those people are oftentimes busy and they do not have time to brew their coffee. Moreover, those who have children usually face the problem that if they leave the coffee in the coffee machine, their children might tempt to drink it.

2.Students who simply do not have coffee machines and prefer instantaneous coffee, which they can easily make at any given time.

Thus, we can see that Nescafe is aimed for younger audience as its core segment.   Targeting the younger audience as its core segment, it is very important for the company with such a strong brand as Nescafe to distinguish the core values for this type of customers. Such values are individuality, independence, pleasure, self-confidence.

Thus, the brand is positioned as the one, which has extraordinary taste that you want to enjoy every day. The slogan sounds like “Don’t let anyone prevent you from enjoying your favorite taste”. The company emphasizes both functional qualities of the product, as well as special feelings that it gives to the customers – pleasure, comfort, and the whole imaginary world that you want to enjoy over and over again. Nescafe is really aimed to be “Your favorite taste,” as another slogan states. Thus, we can see that Nescafe is professing more individualistic values.

However, Nescafe is still perceived as a caring, charming brand, though it gives self-confidence and assures good taste. People choose this brand as they trust its long-standing reputation and think this brand is very reliable. Moreover, it is quite affordable as well. Since it cares about people, Nescafe, as it was mentioned before, presents something for everybody – a wide range of choice from different type of product to different sizes and prices.

Having analyzed the positioning of Nescafe, it is easier to determine the key messages that are being delivered via different channels of communications. The first channel of communication is television with large-scale advertising. The key message that are being delivered is that Nescafe is a wonderful taste that needs to be enjoyed and enjoyed. Global commercial portraying woman in a peculiar garment trying to become unnoticed by her husband to be able to enjoy Nescafe alone is the best proof of that.

Thus, we can see that brand managers of Nescafe are emphasizing physical qualities of the product, specifically its taste. However, the TV with its ability to show the wide range of colors, sounds and images is also chosen to make people feel and understand the sophistication of Nescafe’s taste. It was already mentioned that Nescafe is positioned as a premium segment coffee (despite subbrand Nescafe classic). That is why it is crucial to transmit to the audience the very special qualities, the originality of the brand.

Thus, on of the original feature of Nescafe appears to be its sophistication, its elite taste. The commercial is trying to convey that if you drink Nescafe, it means that you belong to the chosen circle of people who have exceptional taste, namely elite.

The second channel of communication is Internet. In fact, Nescafe has its own web-site separate from the site of the producer Nestle. Nescafe site was created in order to give its target audience ampful information about the product and the brand in particular. It has the description of all the existing types of Nescafe (subbrands), about the new products that appears in the product line. It also tells about the coffee as a physical substance, about its nutrition etc.

Thus, the main message that is being delivered via Internet (including Internet advertising) is that brand Nescafe is so diverse, that everyone can find something that suits him/her the best wether it is Necafe Colombie or Nescafe Gold. The message stimulates to try Nescafe and to match the desire with the available product brand.

Finally, the third channel of communication is publicity. The latter is achieved by creating different kinds of informational grounds. It can be sponsorship of certain events that are covered by different types of media. It can be informational articles discussing the problem of coffee-drinking. It can also be different special events that are also covered in media.  For instance, in 2004 in England there was a contest the winners of which could experience a luxury balloon flight and stay in the country hotel house.

The evnts was transmitted via TV. This was a great informational ground and thus the cause of publicity. The main message that is delivered via publicity is that Nescafe is a reliable trustworthy and responsible brand. Thus, drinking Nescafe one can be sure of its exceptional quality. In other words, publicity is aimed to ensure good reputation of Nescafe and ultimately to form a strong brand loyalty of customers.

As for pricing, it is not dependent on the life cycle of the product. Coffee is a product with an extended life-cycle since the taste and the quality of it are unique, and the customers are usually loyal to the brand that can ensure the same quality taste over and over again. Therefore, the pricing of Nescafe is based upon its segmentation. Simply saying the premium segment brands such as Nescafe Gold, Nescafe cap Colombie, Nescafe Alta Rica cost more. They are aimed at elite target audience with more than average level of income.

Similarly, there is also an offer for the lower income level people who cannot afford buying premium segment products.  This offer is called Nescafe Classic, which is substantially cheaper than brands mentioned before. Thus, we see that Nescafe pricing strategy is more of a marketing tool that allows to cover more of a target audience. Yet, the key target audience for Nescafe still remains people with more than average income segment that can afford buying elite products.

In conclusion, it is important to say that Nescafe is aimed to embrace as big audience as possible. However, its primary focus is on younger people with middle and high income, who are self-confident, active and enjoy pleasure. The company positions its brand as the one giving tempting taste that you want to enjoy. Since the brand is designed to embrace wide circle of customers, the company uses differentiation while pricing the product, giving its customers the opportunity to choose from different types and sizes.

The key messages that Nescafe is trying to deliver depends on the channel of communication. yet, the main messages emphasize Nescafe’s exceptional taste, reliability of the brand and its peculiarity varying on the subbrand, so that everyone can find something that suits him/her best.

References

Applbaum K. “The Marketing Era” Routledge, New York, 2004
Brown S. “Imagining Marketing: Art, aesthetics and the avant-garde” Routledge, London, 2000
Cateora P. ”International Marketing”, 7th ed. Irwin, Homewood, IL, 1990
Laforet S. (1999) «Managing Brand Portfolios: Why Leaders Do What They Do” In Journal of Advertising Research, vol.39, p.23
Parsons A. (1996) “Nestle; The visions of local managers” In The McKinsey Quarterly, no.2, pp.21-22

ACKNOWLEDGEMENTS

We have taken a lot of efforts in completing this report. However, it would not have been possible without the kind support and help of many individuals who have been there for us along this journey as to complete this report in time. Alhamdulilah, first of all we would like to thank God for given us the strength and wisdom as finally we were able to complete our report effectively and efficiently. Thank God for letting us through all the difficulties and have experienced His guidance day by day. A special appreciation to our family.

Words can not express how grateful we are to our mother, father, and our siblings for all of the sacrifices that they have made on our behalf. Their prayer for us were what sustained us thus far. We would like to express our special appreciation and thank to our BEL422 lecturer, Madam Asha Latha B. S. for the valuable advice and support she has given to us in the writing of this report apart from being a tremendous mentor for us through out this semester. This report had been done with all afford by group members eventhough there were constraints while doing this report. Fortunately, all the constraints are settled due to our group members co-operation and ideas.

We are highly indebted to our friends for their support as well as they diligence extended in providing us necessary information in completing this report. Last but not least, our deepest thank to our respondents for their understanding and support. THANK YOU ( [pic] SUMMARY This study was conducted to gauge on consumption of caffeinated beverages among UiTM students. It was requested by our BEL422 lecturer Mdm. Asha Latha B. S. to fulfill the course requirement. It was requested on 19th September 2012. The investigation was done by distributing questionnaires to 20 respondents comprising Business and Law students at UiTM Shah Alam. Data was collated and analyzed using a basic frequency analysis derived from Microsoft Excel Software.

Secondary sources were also referred to, to obtain background information required for this report. The main finding

TERMS OF REFFERENCE

On 19th September 2012, Nawwar Binti Khaleefur Rahman, Nur Khalijah Bt. Zaidan, Nuranika Shamimi Binti Shamsdin and Yusmah Binti Yusof, from the Faculty of Business Management, UiTM Shah Alam, were instructed by Mdm. Asha Latha B. S. , the Report Writing lecturer (BEL) to write a report on consumption of caffeinated beverages among UiTM students on questionnaires. The report which includes the background information, findings, conclusions and recommendations is to be submitted on 12th December 2012.

INTRODUCTION

Background of the Study

The report was written to gauge and identify the consumption of caffeinated beverages among tertiary students. It has been observed that some students drink caffeinated beverages and after it has become a habit among students. This report identifies the short term and long term effects of taking caffeinated beverages and determines why these students are reluctant to stop consumption of these caffeinated beverages. This report was requested by Madam Asha Latha B. S on 19th September 2012.

Statement of the Problem

The meaning of “caffeinated beverage” is “a drink that contains caffeine. ” Coffee is the most common one. Black, green and white tea also contain caffeine. Some sodas have caffeine added to them (Coke, Pepsi, Mountain Dew, for instance), as do many energy drinks. There are variety reasons why people like drinking caffeinated beverages. Many folks have coffee to help wake up in the morning. College students are known for knocking back coffee and caffeinated sodas to keep them up for studying the night before a big test. In some studies, caffeine has been shown to help concentration and memory. Too much consumption can increase person nervousness.

If they drink cheap coffee that’s made with robusta beans instead of 100% arabica beans, they may suffer stomach problem. If there is an addiction, measures must be suggested to reduce this and to introduce other form of healthier beverages.

Research Questions

This report seeks to answer the following questions:

• What is the definition of caffeinated beverages?
• What types of caffeinated beverages are popular among tertiary students?
• Why are such beverages being consumed by tertiary students?
• Are the tertiary students aware of the effects of heavy consumption on caffeinated beverages?

What are the drawbacks or setbacks experienced when attempting to stop caffeinated everages?

What are the suggestions for tertiary students to reduce the consumption of caffeinated beverages?

LITERATURE REVIEW

Caffeinated beverages have always been consumed by adults. However, nowadays, most tertiary students are consuming these beverages. Caffeine products are so widely distributed these days that abuse of the substance may be unnoticed. In fact, caffeine is the world’s most widely consumed stimulant, with 54 percent of adults in America consuming on average three cups of coffee a day (Chen and Parrish, 2008). Diet Health Club on September 2011 identifies these beverages as: Any drinks which contain caffeine.

This caffeine is a stimulant that is legal and is one of the most popular stimulants in the world especially among the developed countries. Some of the common caffeinated content beverages include teas, coffees, various kinds of energy drinks and soft drinks. Tea and coffee are found to naturally have caffeine. Whereas some of the popular drinks like cola have intentionally used this caffeine stimulant as one of the ingredients. The relationship between an individual’s amount of caffeine consumption during his/her study session and the individual’s study habits were investigated by Hope (2009). Most of the students revealed their personal consumption of caffeine as well as their study habits when preparing for a test or examinations.

As determined by the researcher, it has been hypothesized that the more the caffeine a student consumes while studying, the more accurately his or her study habits would be labelled as ‘unhealthy’. To keep them ‘up’ for late night sessions, many college students rely on caffeine-packed sodas and coffee drinks which will increase vigilance, sadly this is unhealthy. A research by the (“National Council On Strength and Fitness), it shows that caffeinated beverages have become gradually more accepted within the diets of tertiary students. That shows the consumption of caffeinated beverages can cause long-lasting effects on brain function when utilized during the formative years.

However drinking too much of caffeine can cause health problems or side effects to drinkers. Some side effects from caffeine use can be mere irritation. Others are downright dangerous. For smokers, caffeine can be especially harmful. Nicotine will raise blood pressure and increase the risk of cardiovascular complications. This is because caffeine is the drug used in the world and is part of everyone’s daily life-style, it has gone unnoticed as a potentially harmful substance to most people’s health. An article “Caffeine Awareness Association”(2010) also indicates that excessive coffee drinking can increase a person’s risk of heart attack. Thus, caffeine can also cause irregular heart rhythms.

And some researchers believe it can increase a woman’s chances of getting cancer. Caffeine has also been linked with central nervous system disorders, Parkinson’s disease, diabetes, and incontinence. The medical community has recently taken caffeine withdrawal quite seriously. It is estimated that one in eight people will experience symptoms that will interfere with ability to work or function for at least a couple of days. Jordan (2004), suggested including caffeine withdrawal as a verifiable condition in the Diagnostic and Statistics Manual of Mental Disorders (DSM). However, caffeine withdrawal is seldom dangerous, though it can make one uncomfortable for a few days. The most frequent symptom ssociated when we attempt to stop caffeinated beverages is moderate to severe headaches. This can occur between 12 and 24 hours after the last intake of caffeine. It usually lasts for one to two days, though some may have a headache for longer. Furthermore, according to Lee (2006), drinking too much of caffeine will impact one negatively. It causes palpitations and withdrawal systems that include headache and drowsiness. Tertiary education often requires students to study for extended hours, especially during periods of increased workload prior to tests and examinations. Removing caffeine from one’s daily routine can be done by approaching the task of lowering the intake of caffeine.

Switching to a coffee with less caffeine and checking labels on medications are the approaches to gradually reduce the amount of caffeine consumption for each day, (“Fit Day”, n. d). According to Haupt (2012), suggests go for an espresso shot because it contains only about half the amount of caffeine as a cup of regular coffee.

METHODOLOGY AND LIMITATIONS

20 respondents were chosen randomly. The respondents were required to answer a questionnaire. These questionnaires were distributed on ______ and collected on ____. Data was collected and analyzed using a basic frequency analysis that was derived from Microsoft Excel software. Various secondary sources and materials were also looked into as differences and guides.

Although this research was carefully prepared, there were still limitations and shortcomings. This report was done on a small scale involving 20 respondents. Since the population was small, the findings presented may not be applicable as general representations. To do so a large sample would be required. The period given to conduct and complete this report was 11 weeks only. Background information for the report was limited to articles from various websites.

FINDINGS

RESPONDENTS’ GENDER

Figure 4. 1 The pie chart in Figure 4. 1 shows the gender who consumed caffeinated beverages. The gender is divided into two categories which are females and males.

Based on the pie chart, it shows that the percentage of females who consume caffeinated beverages among tertiary students is higher than males where by females involve 70% and male 30% only.

AGE OF TERTIARY STUDENTS

Figure 4. 2 The table in Figure 4. 2 shows the age of the respondents who consume caffeinated beverages. It shows that the age of 19 – 21 years old has the highest no of respondents at 12 respondents while the age of 30 – 32 years old has the lowest number of respondents at 1 respondent only.

TERTIARY STUDENTS WHO CONSUME CAFFEINATED BEVERAGES

Figure 4. 3 The diagram above shows the number of students from universities that consume caffeinated beverages.

It shows that University Technology Mara has the highest no of respondents who consume caffeinated beverages among all tertiary students at 9 respondents. The lowest numbers of respondents who consume caffeinated beverages are tertiary students for University Malaya at only 3 respondents.

NUMBER OF RESPONDENTS WHO CONSUME CAFFEINATED BEVERAGES

Figure 4. 4 The pie chart above shows the number of respondents who consume caffeinated beverages. It shows that 20 respondents answered “yes” in this questionnaire.

TYPES OF CAFFEINATED BEVERAGES

Figure 4. 5 Figure 4. 5 shows the types of caffeinated beverages that are taken by tertiary students.

According to the chart, tea is the highest for the types of caffeinated beverages at 52% followed by coffee at 25% and sodas at 25%. Sodas are divided into four types which are Coke at 23%, Pepsi at 59%, Mountain Dew at 10% and others at 9%.

FREQUENCY OF TERTIARY STUDENTS DRINKING CAFFEINATED BEVERAGES IN A WEEK

Figure 4. 6 Figure 4. 6 shows the frequency tertiary students drink caffeinated beverages. Based on the chart above, it shows that 40% of tertiary students drink caffeinated beverages 2 – 4 times in a week. 25% of tertiary students drink it once a week, 20% drink it every day and only 10% of the tertiary students drink it 5- 6 times in a week.

AWARENESS OF THE CONTENTS OF CAFFEINATED BEVERAGES

Figure 4. 7 Figure 4. shows the awareness of the contents of such beverages by tertiary students. According to the chart, it is clear that most students are aware of the contents of caffeinated beverages since 64% answered so. Another 36% of tertiary students are not aware of the contents of such beverages. Therefore, for those who are aware of the contents in caffeinated beverages, the results show that 41% realise the sugar, 23% know of their preservatives, 9% the colouring and 27% the caffeine contents.

ADDICTIVENESS TOWARDS CAFFEINATED BEVERAGES

Figure 4. 8 Figure 4. 8 shows the addictiveness towards caffeinated beverages by tertiary students.

From the chart above, it is clear that 55% of the tertiary students are not addicted to caffeinated beverages. Only 45% of tertiary students are addicted to caffeinated beverages. When they are addicted to caffeinated beverages, most of them control addiction by carrying with plain water (60%), followed by 30% who revert to de-caffeinated beverages and 10% who resort to junk food / fast food.

REASONS WHY RESPONDENTS CONSUME CAFFEINATED BEVERAGES

Figure 4. 9 Figure 4. 9 illustrates the reasons why respondents consume caffeinated beverages. Firstly, 8 out of 20 respondents say they find caffeinated beverages tasty. Next, 30% of the respondents consume such beverages because find them inexpensive. respondents ranked they find caffeinated beverages convenient. Moreover, no respondents ranked finding such beverages inexpensive or tasty. Meanwhile, 40% of the respondents rank they follow their friends as the reason why they consume caffeinated beverages.

THE CONSEQUENCES IF THE RESPONDENTS CUT DOWN CAFFEINATED BEVEREAGES

Figure 4. 10 Figure 4. 10 shows the percentages of the consequences if the respondents cut down on caffeinated beverages. 60% of the respondents will feel sleepy if they cut down their consumption on such beverages. Meanwhile, only 10% of them feel moody after they reduced their intake. None of them feel sick easily if they cut down their consumption.

P7: Outline electronic and non-electronic methods for communicating business information, using examples for different types of audience. The first type of information that I am focusing on is written information that is on screen, the form of the communication is a PowerPoint presentation which is used electronically to present information to members of staff. In Sainsbury’s they hold meetings regularly and my example of a time is when they had a new product that was coming into their store, the presentation explained the product and how they can promote it.

This information is internal as it is in the business its self explained to its target audience who are the employees. The non-electronic method that Sainsbury’s have explained this new product is through posters, they are put onto the notice board for their target audience that is the customers. The purpose of the electronic and non-electronic methods of this information is to keep customers updated but also the members of staff, the audiences are satisfied for the way that the information is presented to them.

The second type of information that I am going to explain is verbal, the form of communication that is used is face-to-face and DVD’s. The target audience for the face-to-face information is the customers, an example of a non-electronic method is in Apple store there is a member of staff who would stand and present themselves to members of the public. Their aim is to sell the product and explain as much information as they possibly can, the benefit of this is that customers can ask questions and they can be answered directly then and there.

The electronic method is the DVD’s that are handed out to the target audience the employees to watch about the new product that the company has brought out. This sort of communication is suitable for the employees as they can watch the video of the new product as many times as they need to learn more about it. The third type of communication is multimedia, this is an electronic form and the target audience is members of the public. I am going to focus on the company Costa that created an advert for their target audience, business men and women.

Costa sells various hot and cold drinks to either sit in or take away, the advert is directed to business men and women as in the advert they state, “For the hard workers on the go, sit in for a drink or take away back to the office”. The disadvantage that Costa has with their advert is that it costs allot of money, it has a time limit of how much information they can show and the target audience would have to be watching the TV at the time.

The non-electronic method is billboards that are shown to the general public, the target audience is then for everyone who is able to buy their drinks, the billboard shows their coffee being delicious and puts across a short message to make people buy it. This is a useful way of communication as it attracts all types of people and not just aimed at one sort of person, this would build up the amount of potential customers.

Starbuck’ Strategy and Internal Initiatives to Return to Profitable Growth Shangze Li MGT 602 National University April 13, 2012 Starbuck’s Strategic Analysis Mission From the stuff of the textbook, there are some content about Starbucks’ mission statement. Howard Schultze who is the chairman and CEO of Starbucks would like their mission statement to convey a strong sense of organizational purpose and to articulate Starbucks’ fundamental beliefs and guiding principles. They renewed their mission statement in October, 2008.

It is “To inspire and nurture the human spirit- one person, one cup, and one neighborhood at a time here are the principles of how we live that every day” (Thompson, 2012). The strategic mission of Starbucks is to establish Starbucks as the most recognized and respected brand name in coffee and for the company to be admired for its corporate responsibility. Starbucks has six corporate values as its own internal guideline. Firstly, provide a great work environment and treat each other with respect and dignity.

Secondly, embrace diversity as essential component in their business approaches. Thirdly, apply the highest standards of excellence to the purchasing process. Fourthly, roast and deliver fresh coffee. Fifthly, develop enthusiastically satisfied customers all of the time. Sixthly, contribute positively to communities and environment, and recognize that profitability is essential to their future success. As such, Starbucks uses these principles as a guideline for all employees to achieve the company’s goals (Starbucks, 2012). Store Expansion Strategy

Thompson mentioned Starbucks’ expansion strategy in this case. From 1993, Starbucks began their geographic expansion strategy to target areas. They believed “Starbucks everywhere” strategy cut down on delivery and management costs. The data showing that their operating margin was 14. 3% in fiscal 2007, but declining store sales and depressed economic conditions had driven the margin down to 6. 0% in fiscal 2008 and 7. 5% in fiscal 2009. In 1995, Starbucks began entering into licensing agreements for store locations in areas where it did not have ability to locate its own outlets.

Till September 2009, Starbucks had company-operated and licensed stores in 50 countries and expected to open 200 new stored internationally in fiscal 2010 (Thompson, 2012). Revenue growth is decreasing because Starbucks lacks experienced management. Schultz has never led a growth effort of such magnitude and is just learning what the job of DEO is all about. Additionally, the US economic slowdown makes Starbucks experience a steeper fall and the customers are more price sensitive the past year. Customers lose their jobs, they don’t have money to drink coffee in Starbucks.

According to this situation, Starbucks should reduce their US expansion efforts. Continued aggressive expansion in the United States by adding as many new store locations as in the past will inevitably act to cannibalize existing locations same store sales. The specialty coffee industry in the United State has entered the mature stage. One of the qualities inherent to the mature stage of the industry lifecycle is overcapacity. Any significant expansion efforts in an environment where overcapacity is present will be met with failure.

By reducing their expansion efforts in the United States, Starbucks can redirect the capital saved into their international expansion efforts. The international market provides an ideal target for expansion and the penetration rate of specialty coffee in many nations is low and these countries have the potential market share capacity (Larson, 2008). Business Strategy From the mid-1990, Starbucks started their products strategy. The strategic objectives were to capitalize on Starbucks’ growing brand awareness and brand-name strength and create a broader foundation for sustained long-term growth in revenues and profits (Thompson, 2012).

Starbucks should start new independent business unit for new products, with decentralization for products-group structure. They should reduce cross functional tasks to reduce confusion between employees and increase efficiency. Starbucks gets the outsiders of their board to gain potential new ideas in new business. Exploring new business is a blue ocean strategy and gets a first mover advantage (Paydirect, 2012). Marketing Starbucks had spent relatively little money on advertising, preferring instead to build the brand cup by cup with customers and depend on word of mouth and the appeal of its storefronts.

Adverting expenditures were $126. 3million in fiscal 2009, versus $129. 0 million in fiscal in 2008. Starbucks stepped up advertising efforts in 2008 to combat the strategic initiatives of McDonald’s and several other fast-food chains to begin offering premium coffees and coffee drinks at prices below those charged by Starbucks (Thompson, 2012). Store Ambience Starbucks should create a store atmosphere that fits the local settings and by training baristas to increase the personal connection between themselves and their customers.

Starbucks encourage s feedback from their customers to induce a family like feeling and instructs all baristas to greet every customer. To further increase this emotional connection with their customers, Starbucks can implement digital picture frames in all store locations and uploads local customer photos and perhaps even customer supplied family photos, customers have the option of uploading some of their family photos into the digital picture frames Starbucks gives them the chance to personalize their local coffee shop and joins a community (Larson, 2008).

Research and development Starbucks can continue in their research and development strategy by being the technological leader in the coffee retail business (Thompson, 2012). Starbucks should continually improve the coffee’s variety. Magazine consumer reports rated McDonald’s drip coffee as tasting better than that of Starbucks in 2009. To ensure the quality of their coffee, Starbucks should continually analyze their brewing systems and practices and considers renovations.

The brewing process should at all times be judged based upon its ability to bring out the complexities and distinctive flavors of the world’s different exotic specialty coffees. Starbucks introduces their Tazo tea brand into the Japanese market. After a successful trial run in Japan, Tazo is brought into the US markets. Starbucks should diversify in related business to secure its own business, as customers have brand preference such as Macdonald, Donuts and so on (Paydirect, 2012). Finance

In March 2010, Starbucks announced it first-ever cash dividend of $0. 10 per share to be paid quarterly starting with the second quarter of fiscal 2010. Net revenues increased 8. 6 percent in the second quarter of fiscal 2010 compared with the same quarter in fiscal 2009 (Thompson, 2012). Starbucks should use the best of their economies of scale to reduce costs. Starbucks should start new independent business unit for analyze the cost and return of new coffee’s product which is a cost driver.

Accountants and auditors should follow the corporate governance to control some unnecessary expense and use performance test to identify the financial competitive advantage (Paydirect, 2012). Starbucks should evaluate their performance substantively and symbolically to avoid any accumulative financial losses to take quick corrective actions. The best evaluation method for Starbucks will be measuring ROI for any new investment they made and for the old investments as well. Starbucks should measures net profit for each store to separate between profitable and non-profitable stores.

Hence, Starbucks will have a clear financial positioning (Paydirect, 2012). Reference Larson, R. C. (2008). Starbucks a strategic analysis. Retrieved on Sep 22,2012 from http:// coe. brown. edu/documents/starbucksastrategicanalysis_ R. Larson_honors_2009. pdf Paydirect. (2012). About Us. starbucks. Retrieved from Sep 20, 2012 from http://www. starbucks. com/about-us Thompson, A. A. , Peteraf, M. A. , Gamble, J. E. , Strickland III, A. J. (2012). Crafting and Executing Strategy: concepts and cases: global edition. New York, NY: McGraw-Hill/Irwin.

Background Nestle is a Swiss multinational company which was founded in 1866 and finally formed in 1905 by merging two companies, and it is the largest food company in the world which products include breakfast cereals, pet care, ice cream, bottled water, dairy products, baby foods, chocolate and confectionery, sports nutrition, weight management, food service, culinary, chilled and frozen food, healthcare nutrition, drinks as well as coffee, and it launches a presence in almost every country in the world.

And it aims at providing good foods, beverages to customers in order to enhance their lives. As we found that Nestle has nearly 8000 brands in worldwide, we decided to focus on Nescafe which is launched in 1938, a brand of instant coffee. The first instant coffee has been developed for seven years, and it has a huge successful after launching during World War II period. And it can be found in 43 countries in worldwide. And it has different types of products in Nescafe, for instance: single serve coffee, house blend, instant coffee in jars and aluminum packs, etc.

It has also launched a coffee machine lately which is greatly helpful in expanding their market share in coffee market. Strengths As Nestle is a well known brand in the world, which means it has a certain and broad geographic coverage in world, so this is good for Nescafe to make any further development and it is believed that Nescafe is the major player in coffee market and it has a strong brand names because of associating with Nestle which has mass market share in the world.

Besides, Nescafe has various products in different flavor and packing which can be fit into different market segment, for example, it has house blend coffee for customers who can make coffee at home whenever they want, also instant coffee in jars and aluminum packs which offer customers an experience in drinking coffee in everywhere at anytime. Moreover, Nescafe has a great position as UK’s No. 1 soluble coffee brand also dominant instant coffee market in some countries. So it has a certain amount of loyal customers and good word of mouth is guaranteed.

Nevertheless, Nescafe is set at a reasonable price that consumers can afford it easily and it can attract more new customers. Weaknesses Although Nescafe has quite a lot of strength, it still has its weaknesses which are coffee market is nearly saturated and people starts concerning health problems; it is because Nescafe has already been introduced coffee in different forms which are no more new forms can be found, which means Nescafe can only expand their market share by extending the product line.

Moreover, it has been recently claimed that caffeine is a central nervous system and metabolic stimulant and it has physically and psychological effect on people if consuming too much; and this can be found in coffee, thus, it may cause a decrease in consumption in coffee as people start caring health problems. Opportunity Even if Nescafe has a big success in coffee market, there are always many opportunities waiting for it.

As I have mentioned before that people start concerning their health problem, it will be a weakness also an opportunity for Nescafe. And it is believed that it will be new and long lasting trend for Nescafe to introduce some new kind of coffee, for example, it has already been launched sugar free coffee, it may also develop organic coffee bean or else coffee which has lower caffeine. Furthermore, Nescafe can open up a Nescafe store which is operating like Starbucks or Pacific coffee company.

Actually it is a potential opportunity for Nescafe to maximize its profit and increase its market share, because it can sell Nescafe’s products in the store, also adding some food or new flavor of coffee for consumers. On the other hands, Nescafe should keep tracking on the latest trend which is helpful for it to innovate new flavors which can win acceptance, for examples, developing a new flavor like green tea latte in whatever form. It will definitely gain consumers’ attention and keep strengthening customers’ loyalty.

Last but not least, Nescafe can try to tie-up with some restaurants to provide its products, in order to spread its product all over the world and customers can buy and enjoy it everywhere. Threat Somehow, Nescafe is facing some threats like Starbucks which is an experienced and well known coffee shop that may drag its market share away. Besides, some coffee lovers may in love with the freshness of Starbucks which is selling just in time coffee.

Plus, there will always be some instant coffee brands with relatively lower price; it is affecting Nescafe that some instant coffee lovers would like to choose the brands according to price instead of quality. And now the world is facing inflation, so does Nescafe is confronting the same problem. It is because inflation leads the cost of Nescafe rise, and Nescafe have to balance between cost and quality which it cannot lower the quality standard to decrease the cost. Vice versa, it has a rising cost caused by keeping good quality standard.

CHAPTER I

The Project and Its Background

This chapter provides all necessary information on the company’s background and nature of business. This includes the company name, location, nature of the business, historical background, mission, vision and core values statement, company objectives and feasibility criteria. Company Name During ancient times, leaves are used as a writing instrument in the form of “papyrus” which provides the knowledge and ideas that built the early civilization of mankind. It is an instrument which made people survive and improve their everyday life, and also, to help exist the world today.

It became our inspiration in putting up a bookstore, the idea of which is to provide information, knowledge, and ideas that will help in supplementing the complex thinking of every person. The Leaflets Bookstore is then formed because of the said conceptualized idea and inspiration. Just like a leaf that produce food for a tree, Leaflets Bookstore will also serve as an instrument in educating people and equip them with knowledge that will help them in forming their own idea of life. Location “A good location is as important as the product”.

Strategically located in Northridge Congressional Avenue Quezon City, Metro Manila with the size of 237 square meters. More than adequate parking space. Reasonably priced per square meter. Rental Payments as well as additional payments shall be stated within the leasing terms including registration of utilities and amenities. Nature of the Business Leaflets Bookstore’s goal is to serve our customers with resources with that will enrich their minds and improve their skills. It also aims to provide them with the most efficient way of book shopping.

The bookstore will offer a large variety of books including published and second-hand/used books. It shall also offer a “book bank service” which will provide used books for rent intended mainly for those customers who cannot afford to buy the books for sale and for those who want to “stop, sit and read”. A mini-cafe will also be established providing snacks and drinks that will make our customers’ reading experience more enjoyable. Historical Background An idea to enrich every mind by gathering and providing reading materials created our will to pursue a bookstore business.

We know that by giving such service, this generation will have their minds filled with necessary information and knowledge. A generation with a good readership will create a responsible generation. Also, a bookstore that is filled only by books and other reading materials makes it plain and regular. We taught that by providing other services more people will come and will be encourage to read. With these little ideas, Leaflets Bookstore came to be. Mission, Vision and Core Values Statement Mission:

Leaflets Bookstore aims to provide wide variety of books and other reading materials with prices fair enough for the youth and middle-class households. Our purpose is to give the best services a bookstore can have with a very relaxing ambience suitable for reading moods complemented by light meals and hot-and-cold drinks through our mini-cafe. Vision: Leaflets Bookstore endeavor to become the most innovative in providing wide variety of books; offering the best place for reading that will give satisfaction to our valued customers. And to be able to extend our services to other parts of the country who are in need of our offerings.

Core Values: Quality, integrity and service are the utmost concern of Leaflets bookstore. We aim to provide our customers with books of good quality and give them excellent service. Company Objectives: 1) To gain an identifiable market share by 35% in the first 2 years of operation. 2) To increase the company’s profit margin by 10% per year. 3) To gain the company’s overall return-on-investment before its 10th year of operations. 4) To reach out to class A-B and C customers through extensive promotional tools and services. Feasibility Criteria Innovation.

All innovation begins with creative ideas. We define innovation as the successful implementation of creative ideas within an organization. In this view, creativity by individuals and teams is a starting point for innovation; the first is necessary but not sufficient condition for the second. Originality. An original work is one not received from others nor one copied based on the work of others. Accessibility. Accessibility is a general term used to describe the degree to which a product (e. g. , device, service, environment) is accessible by as many people as possible.

The products that we offer must be accessible to our market at all times Creativity. Creativity is typically used to refer to the act of producing new ideas, approaches or actions, while innovation is the process of both generating and applying such creative ideas in some specific context.

CHAPTER II

Management Aspect

This chapter contains information on the company’s management aspect. It includes the pre-operating period, form of business organization, management control, financing, liabilities of the owner and personnel requirements.

Form of Business Organization

Leaflets bookstore is organized by people who bind themselves through the aid of a written legal agreement to contribute their resources to create a common fund and later divide the profit based on the portion of contribution to the fund. It is advantageous for the businessmen to form a partnership because the unlimited liability of the partners make it attractive from the point of view of the creditors to extend loans beyond the capacity of the partnership to pay.

The combined personal liability of the partners also offers a better proprietorship. Since more than one person participates in the business, closer supervision of all its activities will be attained. All partners directly involve in the management of the business and each has specific tasks and responsibilities to perform. The partnership will be composed of three (3) partners. It is a general partnership. All three partners are general-industrial partners who will contribute money and property as their capital.

Management Control

The firm will establish two major positions that will handle the firm’s operation. A General Manager, who is a major shareholder in the partnership, entitled to establish the company policies and is responsible for supervising the company’s direction and growth; and the Operations Manager, who is also a general partner, entitled to supervise all of the company’s existing systems and is responsible for executing the general manager’s policies and instructions in line with the company’s direction. To facilitate all financial records of the business an accountant will be hired.

Our day to day cash and credit transactions will be taken care of by the cashiers. Sales Representatives will be hired to assist our valued customers. The organizational structure systems and design id formulated by the firm to allocate system operations and responsibility to every designated part of the organization. Making it possible to maintain the company’s organizational unity in its working capabilities.

Financing

The business will have an initial capital of P30,000,000. This excludes the personal assets of the partners which will later be used in case of insolvency.

The capital will cover the financing from the pre-operating period up to the start of the normal operation. This includes the acquisition of the book supplies, furniture and fixtures, cash registers, utensils etc. This also covers the rental fees, advertising and promotional fees, operational expenses and other miscellaneous expenses.

Business Relations

Leaflets will maintain good mutual affairs with its suppliers—Book City, a used book supplier, Rex Publishing, Goodwill Bookstore, CLC Philippines and Anvil Publishing which will provide us with various types of published books that we will sell and Convenient Distribution Incorporated, Del Monte Philippines and Nestle Philippines for our food products. We will also keep a cordial relationship with our customers especially to those who provide us with used books through buy-and-sell transactions.

Business Secret

Bookstores are very common nowadays and as a newbie in the market, Leaflets has to have an edge among its competitors. We offer a book bank service in which the customers can rent some of our books. We put value to our customers. We keep our prices as affordable as possible and we make sure that our products are available all the time.

Liabilities of the Owner

Each partner contributed to the capital in order to sustain the needs of the partnership.

In case the possibility of loss or if bankruptcy occurs, the partners are obliged to either contribute their own personal assets in order to comply with the demand of the creditor, accept a new partner or dissolve the business.

Legal Requirements

Before the start of the business operation, legal requirements are to be sought.

Screening, interview and examination will be conducted upon submission of application forms.

Employment Procedures:

1. Qualified applicanres:eas clease training areas cleas all the timeinaryn the customers with their needs. an instrument in educts will be notified within the day during the application process and scheduling of training.
2. Physical and medical examination, NBI clearance, SSS number and 2×2 pictures should be submitted within one week.
3. Newly hired employees shall undergo an orientation.
4. A contract is to be signed by the employees upon fulfillment of the conditions.

Training Procedures:

1. Trainees are required to wear proper uniform during training.
2. One week training period will be given to the trainees.
3. They are given a one-hour break during trainings.
4. They are expected to arrive 30 minutes before their shifts.
5. Trainees caught doing unlawful activities such as smoking and sleeping is subject to immediate disciplinary action.
6. Trainees are expected to keep the training areas clean all the time.

Rules and Regulations:

1. All employees are expected to wear complete uniforms and observe proper hygiene.
2. Employees are expected to arrive an hour before their respective time of duty.
3. Visitors are not allowed during working hours.
4. Employees must consult the supervisor in charge in case of customer complaints.
5. Cellular phones/ Telephone calls are strictly prohibited during working hours except in case of emergency.
6. All employees covered by this agreement shall strictly observe and adhere to faithfully comply with the company rules and regulations.
7. No covered employees shall be discharged, suspended or otherwise subjected to disciplinary action without being informed of the act or violation.

Working Days and Hours of Work:

1. The established regular days of operation shall be seven (7) days a week from 9am to 9pm equal to twelve (12) hours a day (a total of eighty-four (84) hours a week).
2. The company shall prescribe its regular or official work day, working time, work shift and rest day of employees.
3. The regular or official work day, working time, work shift and rest day of any employee may be changed or modified by the company from time to time upon notification to the employees concerned depending on their circumstances or when the operation of the company requires.

Leave of Absence with Pay:

1. Vacation leave
2. Sick leave Maternity leave
3. Paternity leave
4. Educational leave

Overtime Pay:

Employees who, due to the necessities of the operations, may be required by the company to render the necessary overtime work during the regular work days, rest days, and legal holidays, especially during the store sessions such as school openings, Christmas, etc shall be entitled to the payment of overtime pay in accordance with the law.

For the purpose of the overtime pay, the legal holidays shall include the of:

1. New Year’s Day
2. Araw ng Kagitingan
3. Labor Day
4. Independence Day
5. National Heroes Day
6. All Souls’ Day
7. Bonifacio Day
8. Christmas Day

Non-working holidays:

1. 1. Holy Wednesday
2. 2. Maundy Thursday
3. 3. Good Friday
4. 4. Black Saturday
5. 5. December 31 (New Year’s Eve)
6. 6. All Saints’ Day
7. 7. December 24 (Christmas Eve)

Bonuses: 13th Month Pay The company shall give 13th month pay to employees who have completed at least 1 year of continuous and satisfactory service with amount equivalent to his/her monthly basic pay and shall be given on the 15th of December.

CHAPTER III

MARKETING ASPECT

This chapter contains information on the company’s marketing aspect. It includes the supply and demand data, prices and the marketing programs to be used to promote the business.

Demand

YC = a + bx a = ? y / n b = ? xy / ? x2 x = years as measured from the middle year(s) n = number of past years covered Y (Demand) = Total population x % Primary target market x % tryers x % users x frequency of purchase A survey was conducted for the purpose of identifying the potential market share of Leaflets bookstore. It is composed of 250 respondents, mostly students and young professionals belonging to the class A-B and C of the market.

• Ninety-four percent (94%) of Filipino adults can read (Simple words at least).
• Ninety-percent (90%) of Filipino adults have read books, while 68% have read non-school books.
• Twenty-two percent (22%) of Filipino adults read nonschool books at least weekly, while another 22% read nonschool books only a few times a year. •
• Ninety-one percent (91%) of those who read non-schoolbooks do so to get information or gain additional knowledge, while 9% do so for enjoyment of amusement.
• Seventeen percent (17%) of Filipino adults, in the past year, read only one non-schoolbook, while 14% read at least ten non-school books.
• Filipino adults from ages 18-24 read more non-school books, with five books as average, compared to older ones, in the past year.
• Fifteen percent (15%) of Filipino adults bought at least one non-schoolbook for personal reading in the past year.
• Forty-two percent (42%) of Filipino adults do not know if a public library exists in their locale.
• Seventy-six percent (76%) of those who read non-school books do not borrow from libraries.
• Only 4% of Filipinos have home libraries.
• Fifty-eight percent (58%) of those who bought non-school books for personal reading spent at most P 200 in the past year. Fifty-seven percent (57%) of Filipino adults prefer to read non-school books in Tagalog, 30% prefer English, and 13% prefer Cebuano.
• Romance/love stories (26%) and the Bible (38%) are the most popular non-school books read by Filipino adults. The National Book Development Board commissioned the Social Weather Stations to conduct a survey on the reading attitudes and preferences of Filipinos.

This is the most comprehensive study on book readership in the country. The survey was conducted from March 10 to 25, 2003 with 1,200 respondents composed of 300 voting-age adults from every study area: National Capital Region, Balance Luzon (areas within Luzon but outside NCR), Visayas, and Mindanao.

The sample size has an error margin of +/-3% for the entire Philippines and +/-6% for every study area. Of the total respondents, 63. 6% are from rural areas, while 36. 4% from urban. Of the total respondents, 7. 7% belong to classes ABC, 67. 4% class D, and 24. 8% class

Significant Findings of the Book Readership

Survey Readership of the 7 -17 years old age group Nationwide, 60% of the households surveyed have family members aged 7-17. Of these households, 35% have at least one member of the 7-17 age group who reads non-schoolbooks. Of the total family members aged 7-17, only 26% read non-schoolbooks, but most of those who read non-schoolbooks read at least weekly.

Readership of non-schoolbooks among members aged 7-17 tends to be higher among females, classes ABC, those with a library at home, and those whose household heads have high education. The most popular non-schoolbooks read by the 7-17 age group are the Bible (22%) and romance novelettes (22%). Readership of Filipino Adults The good news is 94% of Filipino adults can read (simple words at least). 90% have read books at least some time in their lives. 68% have read nonschoolbooks. For those who read, 91% read to gain knowledge while 9% read for enjoyment. Accessibility of Bookstores and Libraries The survey reveals that many of the respondents (42%) are not aware if a library exists in their locale. 0% say that bookstores are not within walking distance from their residence, and 18% do not know if there is a bookstore in their locale. Data gathered from the National Library show that there are only 511 municipal libraries out of 1,496 municipalities, and 49 provincial libraries out of 80 provinces. Adult readership of non-schoolbooks tends to be higher among:

• those with high levels of education,
• those who attended private rather than public schools,
• those from upper socio-economic levels,
• those with higher personal monthly income,
• those from urban rather than rural areas,
• those younger in age,
• those who are not married,
• those who have libraries in their homes and offices,
• those living nearer to bookstores and public libraries, and
• those whose social networks (kith and kin) also like to read.

While Filipino adults generally recognize the value of reading books, many (43%) can let a whole year pass without reading a single non-schoolbook. On the other hand, 15% read 2-3 non-school books, and 14% read at least 10 non-school books. Books are read more for gaining knowledge and information, and thus perhaps book reading is considered something to do when the need arises. Watching TV, movies and videotapes, listening to the radio, and going to malls seem much more fun to do. Perhaps parents, educators, publishers, and advertisers ought to do more to portray book reading as fun to do too.

Filipino adults generally find books to be good gifts, and although considered costly, a book is not regarded as a luxury item but a necessity. The survey shows that readership of non-schoolbooks is higher among Filipino adults from the upper socio-economic classes who have reached high levels of education and attended private schools, are younger, either single or without a partner, and live in the urban areas. Moreover those who live near libraries and bookstores read more often. The Bible (38%) and romance novels (26%) are the most commonly read books by adult readers. The highest percentages of Bible-readers are from Mindanao (51%), class E (43%), females (42%), and 45 and above years old (49%).

The highest percentages of romance novel readers are from Balance Luzon (27%) and Visayas (27%), class E (28%), females (37%) and 18-24 years old (46%). After the Bible and romance novels, females like to read about cooking (11%), while males read about politics (10%). Manner of Acquiring Non-Schoolbooks Allowing for multiple answers, the following are the means through which Filipino adults who read non-schoolbooks acquire them: borrowing from other people (52%), receiving books as gifts (40%), borrowing from libraries (24%), renting (18%), and buying (15%). Majority of respondents from all study areas and all socio-economic classes do not borrow from libraries. Buying Non-Schoolbooks

The percentage of those who bought non-schoolbooks for personal reading in the past year increases with social class, educational attainment, and personal monthly income. 58% of Filipino adults who bought non-schoolbooks in the past year spent only a maximum of P200. 16% spent more than P1,000. Among classes ABC, 38% spent more than P 1,000.

Real Choices at Starbucks

Starbucks started as small coffee shop in a tourist area called Pikes Place Market in Seattle. The three unknown pioneer of Starbucks wanted to share their passion for brewed coffee and tea. During their first year in the business, they experimented with all sorts of coffee blend until they came up with their own flavor. Their business became an instant success using the word of mouth selling brewed coffee cup by cup. This is what inspired them to open a second store to target the wider market. By the early 1980’s, Starbucks expanded to four new stores in Seattle area.

Since then, they became the largest retail company in the world. This coffee company grew from four Starbucks store to having currently 16,635 stores globally including 11,068 in the United States, 1000 stores in Canada, and more than 800 in Japan (Salomon 271). This amazing expansion can be attributed to Howard Shultz’s dedication to brewing coffee who bought the coffee’s trademark twenty five years ago. The main reason Starbucks has done so well for four decades can be attributed to their commitment to high quality products and passion for educating customers to appreciate the qualities of fine coffees.

Strength

Starbucks has become a popular company for selling the best tasting coffee products around the world. As a result, everyone saw Starbucks as the biggest and best in the business (Higbee 6). They acquired a solid brand reputation and have a world renowned company logo. There are no other national coffee bar competitors in the same scale as Starbucks. They are the only competitor in the coffee business that has a recognized brand image. They also own trademarks, copyrights, domain names, patents. The current SEC filing of Starbucks shows that the company is in a positive financial condition.

The company’s total revenue for the first quarter of fiscal 2012 had increased sixteen percent and the net income was up more than ten percent (Smith, http://wallstcheatsheet. com/). This result was primarily driven by increase revenues from company-operated stores, licensed stores, and CPG foodservice contributing to approximately $3. 44 billion (http://investing. businessweek. com/). The overall areas of Starbucks business, from domestic and international retail operations to the company’s specialty businesses delivered strong financial performance, and innovation was the reason for the success of the company’s operations.

Weakness

Even though Starbucks has strength to stay in the business, it also has a few weaknesses. Starbucks must deal with these weaknesses in order to remain as a competitor in the retail market. One of the company’s most prevalent obstacles is the price they charge for a cup of coffee.

While most people consider Starbucks coffee as a luxury and would pay whatever price is set, there is an increasing opinion that Starbucks charges too much (Higbee 7). Sometimes it is difficult for a company to penetrate the mass market with the prices above market averages. While this weakness may not come to reality in the short term, it is possible that this company is somewhat maturing since they have grown so rapidly penetrating the U. S. market.

Opportunities

Opportunities present themselves when it comes to Starbucks business strategy which provided the options to strengthen its retail market.

Starbucks would not be able to effectively compete with its competitors if it not with these opportunities. They continued their quest by expanding its retail operations and sales. They pursued other opportunities by introducing new products and develop new channels to stay on top. Starbucks is in great position to expand its global business more that they already have. Since they expanded to Europe, Canada, and Japan, they enjoyed much success in these countries and their future plan is to open more Starbucks in Asia, Latin America, and the Far East.

Starbucks also created numerous partnerships that will ensure its longevity for a long time. Formed a partnership with Pepsi Company and created a coffee type bottled drink called Frappucino. These Frappucino bottles were currently being sold in shops, grocery stores, and convenient stores. This drink has grown in popularity in the past that it was labeled by the consumers as “the coffee on the go” (Higbee 6). In addition, Starbucks also partnered with Target that pave the way to opening a coffee shop inside the shopping center.

Threats

One of the major threats to Starbucks is their competition with other coffee chain, such as Coffee Bean and Peet’s Coffee. Other companies, such as McDonalds, Dunkin Donuts, and Burger King already have the infrastructure in place and are instead adding quality coffee to their menu to compete with Starbucks (Higbee 8). But for one thing, many people enjoy buying coffee even though it is pricey because of the environment and experience that allow people to enjoy, relax, and mingle while sipping a cup of coffee. Other threats to Starbucks are the gas station and restaurants industry.

Many people are in the habit of buying breakfast and coffee at the local gas stations such as 7 Eleven. This practice is done mostly out of habit, but also for convenience especially for morning paper paired with a cup of coffee before going to work. Many consumers are also attracted by the convenience and the economics of the big mug cup of coffee they can obtain. Other consumer concerns are the trend towards more healthy ways. More and more people are becoming aware of the risk in consumption of caffeine. Too much caffeine can produce restlessness, nausea, headache, tense muscles, sleep disturbances, and irregular heartbeats.

Caffeine can also increase the production of stomach acid that causes acid reflux. And finally, the price of coffee is so volatile that it remained as the biggest complaint by its customers.

Recommendation

Starbucks has created such a strong corporate culture and strong work values that it allows a company to successfully engage in product diversification. However, amongst the first thing that Starbucks needs to have is to define their brand image by lowering the coffee prices. It needs to be conveyed to the market in a precise manner, so that there would be no confusion amid Starbucks customer complaints.

This is vital if Starbucks wanted to maintain its domestic market share competing with the likes of McDonald, Dunkin Donut, and Burger King. They must resolve all the consumer concerns so that they can embark on another project with smooth transition.

Conclusion

Overall, as long as Starbucks maintains and promotes a strong quality product without deterring from its corporate-level strategy, it will always have number of opportunities ahead. There is a very strong base for this company which will allow it to pursue desired avenues with aggressiveness and confidence.

Works Cited

1. Salomon M, Marshall G, Stuart E, Marketing: Real People Real Choice 7th Ed. P. cm. Higbee J, Liaw Z, Ting C, Tjho K, Ton M, The Future of Starbucks, http://www. mcafee. cc/Classes/BEM106/Papers/2008/Starbucks. pdf
2. Smith G, Cost of Coffee Could Squeeze Starbucks, http://wallstcheatsheet. com/stocks/cost-of-coffee-could-squeeze-starbucks. html/
3. United States Securities and Exchange Commission, FORM 10-Q, http://investing.businessweek. com/research/stocks/financials/drawFiling.asp?docKey=1370001193125120324276VATRT3JVABGO7FIGIBD5RTCJ&docFormat=HTM&formType=10-Q#D270627D10Q_HTM_TX270627_3